Exhibit 10(a)
SIXTH AMENDMENT
TO
SECOND AMENDED AND RESTATED CERTIFICATE
AND AGREEMENT OF LIMITED PARTNERSHIP
OF
INTERSTATE GENERAL PROPERTIES LIMITED PARTNERSHIP S.E.
THIS SIXTH AMENDMENT dated as of April 1, 1998 ("Effective Date") to
that certain Second Amended and Restated Certificate and Agreement of
Limited Partnership of Interstate General Properties Limited Partnership
S.E., a Maryland limited partnership (the "Partnership"), dated December
31, 1986, as amended, is made by and among James J. Wilson, a General
Partner of the Partnership, Interstate General Company L.P. ("IGC"), a
Delaware limited partnership, a General Partner and Limited Partner of the
Partnership, and IGP Group Corp. ("IGP Group"), a Puerto Rico Corporation,
a Limited Partner of the Partnership (collectively the "Partners").
W I T N E S S E T H:
WHEREAS, the Certificate and Agreement of Limited Partnership of
Interstate Properties was filed on June 29, 1981, in the office of the
Clerk of the Circuit Court of Charles County, Maryland; and
WHEREAS, the foregoing Certificate and Agreement has been amended
from time to time, most recently by that certain Second Amended and
Restated Certificate and Agreement of Interstate General Properties Limited
Partnership S.E., dated as of December 31, 1986, as amended by that certain
First Amendment to Second Amended and Restated Certificate and Agreement of
Interstate General Properties Limited Partnership S.E., effective January
1, 1987, that certain Second Amendment to Second Amended and Restated
Certificate and Agreement of Interstate General Properties Limited
Partnership S.E., effective January 1, 1987, that certain Third Amendment
to Second Amended and Restated Certificate and Agreement of Interstate
General Properties Limited Partnership S.E., effective February 11, 1988,
that certain Fourth Amendment to Second Amended and Restated Certificate
and Agreement of Interstate General Properties Limited Partnership S.E.,
effective February 16, 1990, and that certain Fifth Amendment to Second
Amended and Restated Certificate and Agreement of Interstate General
Properties Limited Partnership S.E., effective December 18, 1991 (together
the "Partnership Agreement"); and
WHEREAS, IGC desires to transfer and contribute to IGP Group a
portion of its interest in the Partnership consisting of all of IGC's
indirect interest in the Service Business and the Designated Entities (as
those terms are hereinafter defined)
WHEREAS, the Partners desire to amend the Partnership Agreement to
admit IGP Group as a Limited Partner, to provide special allocations and
distributions with respect to the Service Business and the Designated
Entities, and for other purposes, and agree to enter into this Sixth
Amendment to the Partnership Agreement;
NOW, THEREFORE, in consideration of the foregoing, of the
undertakings of the parties hereinafter set forth and good and valuable
other consideration passing between the parties, receipt whereof is hereby
acknowledged, effective as of the Effective Date:
1. Article 1, relating to definitions, shall be amended as
follows:
(a) The following new terms shall have the following
respective meanings:
Designated Entity: The following entities: Bayamon Gardens
Associates, Colinas de San Juan Associates, and Valle del Sol
Associates.
Designated Entity Distributions: All distributions of cash or
other property received by the Partnership from a Designated Entity
or with respect to the Partnership's ownership or disposition of an
interest in a Designated Entity, including but not limited to,
distributions of operating profits, capital proceeds, or liquidating
distributions from a Designated Entity, the receipt of cash proceeds
or other consideration from the sale or other disposition of an
interest in a Designated Entity by the Partnership, or the
distribution of property in kind by the Partnership that consists of
interests in the Designated Entities or of property in kind received
by the Partnership with respect to its ownership of an interest in a
Designated Entity.
Designated Entity Items: All items of income, gain, loss,
deduction or credit arising from the Partnership's ownership or
disposition of an interest in a Designated Entity, including but not
limited to, the Partnership's distributive share of a Designated
Entity's income, gain, loss, deduction, or credit, and any gain or
loss arising from the disposition of the Partnership's interest in a
Designated Entity.
Service Business: All activities of the Partnership relating to
services rendered to owners of real estate, including but not limited
to management and administrative services provided with respect to
the construction, development, sale, or rental of real property
(including personal property rented in connection with the rental of
real property).
Service Business Items: All items of income, gain, loss,
deduction or credit arising from the Partnership's Service Business,
including but not limited to items of income, gain, loss, deduction,
and credit arising in connection with the performance of services in
the Service Business and any gain or loss arising from the sale or
other disposition of assets used in the Service Business.
Service Business Distributions: For any period, the total
amount of distributions of cash or other property made by the
Partnership with respect to the Service Business, including but not
limited to the distribution of net cash from the receipt of
management fees, refinancing fees, construction management fees,
sales commissions, or other amounts by the Partnership in connection
with the performance of services in the Service Business, net
proceeds from the sale, financing, or other disposition of assets
used in the Service Business, and distributions of property in kind
that consist of assets used in the Service Business.
(b) The definition of "Net Cash Flow" shall be amended by
excluding therefrom all Designated Entity Distributions and Service
Business Distributions.
(c) All capitalized terms used and not defined herein shall
have the meanings ascribed thereto in the Partnership Agreement.
2. IGP Group is admitted to the Partnership as a Limited Partner
in the Partnership with an initial capital account balance equal to that
portion of IGC's Capital Account balance that is attributable to the
Service Business and the Designated Entities.
3. Article 8 of the Partnership Agreement is amended to reflect
the following allocations and distributions:
(a) Designated Entity Items and Service Business Items shall
be allocated: (1) first, to James J. Wilson, but only to the extent that he
would have been allocated such items under the allocation provisions in
effect prior to this Sixth Amendment (and assuming for purposes of this
sentence that such prior allocation provisions had been in effect on and
after the Effective Date); and (2) second, to IGP Group.
(b) All Designated Entity Distributions and Service Business
Distributions shall be distributed (1) first, to James J. Wilson, but only
to
(d) All other allocations and distributions shall be made in
accordance with Article 8 of the Partnership Agreement.
(e) It is the intent of the Partners that the allocations of
Designated Entity Items and Service Business Items under this section 3 of
the Sixth Amendment will be respected for both Puerto Rico and United
States federal income tax purposes and the Partnership shall interpret
these allocations and Article 8 of the Partnership Agreement, as so
amended, in a manner consistent with that intent.
4. In the event of the liquidation of the Partnership, all
liquidating distributions shall be made in accordance with Article 17 of
the Partnership Agreement; provided, however, that it is the intent of the
Partners that IGP Group shall be entitled to receive from the Partnership
(1) an aggregate amount equal to the amount of Designated Entity
Distributions and Service Business Distributions that would have been
distributed to IGP Group under Section 3(b) of this Sixth Amendment for the
period beginning on the Effective Date and ending on the date of the
liquidation of IGP Group's interest in the Partnership (as determined as if
no such liquidation had occurred on such date and all distributions to IGP
Group were made under Section 3(b) of this Sixth Amendment), and (2) any
property distributed in kind by the Partnership that consists of interests
in the Designated Entities, of property in kind received by the Partnership
with respect to its ownership of and interest in a Designated Entity, or of
assets used in the Service Business (for purposes of applying this
sentence, any property to be distributed in kind to IGP Group under clause
(2) shall be treated as a distribution of an amount equal to the fair
market value of such property for purposes of applying clause (1)).
Therefore, to the extent possible, the Partnership shall make such
allocations as may be necessary (including but not limited to allocations
ofpital account balance equal to the remaining portion of the amount
intended to be distributed to IGP Group under the proviso of the preceeding
sentence.
5. Except as specifically provided herein, the Partnership
Agreement shall remain in full force and effect, unaffected hereby. If
there are any conflicts between the terms of the Partnership Agreement and
this Sixth Amendment, then and in such event this Sixth Amendment shall
control.
6. Each Partner hereby agrees to be subject to and bound by the
Partnership Agreement, as amended by this Sixth Amendment.
7. This Sixth Amendment may be executed in any number of
counterparts, all of which together shall constitute a single instrument.
IN WITNESS HEREOF, the parties hereto have executed this Sixth
Amendment to the Partnership Agreement as of the date first written.
GENERAL PARTNER:
/s/ James J. Wilson
-------------------------------
James J. Wilson
GENERAL PARTNER AND LIMITED PARTNER:
Interstate General Company L.P.
By: Interstate General Management
Corporation, Managing General
Partner
By: /s/ James J. Wilson
-----------------------------
James J. Wilson, President
LIMITED PARTNER
IGP Group Corp.
By: /s/ Francisco Arrivi
----------------------------
Francisco Arrivi, President